Socialist Appeal - British section of the International Marxist Tendency: the Marxist voice of labour and youth.

In the past two months a handful of tiny Islands off the coast of China have been making headlines across the world. But why are these seemingly irrelevant islands so significant?

In the past two months a handful of tiny Islands off the coast of China have been making headlines across the world. The disputed island chain, known as the Diaoyu in China and the Senkaku in Japan, made international news after Japanese nationalists planted the flag of Japan on its uninhabited shore (with lavish media coverage). The tension escalated when in September the Japanese government nationalised the islands, previously owned by the Kurihara family, sparking off a wave of militant nationalist protest in China. But why are these seemingly irrelevant islands so significant?

Over the past sixty or so years world relations have enjoyed a period of relative peace and stability. The immense contradictions capitalism built up over a period of expansion in the late 19th/early 20th century plunged the system into decades of unprecedented crisis and turmoil. But the carnage of World War II cleared the deck of these contradictions and gave capitalism a massive new lease of life. The outcome of this war laid the basis for enormous growth in world trade and established a system of international relations that, notwithstanding the collapse of Stalinism, has survived to this day. The bourgeoisie has grown accustomed to the apparent normality of peaceful relations between the main powers. But the historic crisis of world capitalism has undermined the foundations for this stability. The increasing tensions in the South China Sea, especially the new crisis over the disputed Diaoyu/Senkaku Islands, is clear proof that we have entered a new era of instability in the relations between the major world powers.

These islands, five in number, encompass a grand total of seven square kilometers, with a total human population of zero. The islands, or rocks as they may more accurately be referred to, are barren and remote. The Chinese government claims they have been part of Chinese sovereignty since the 14th Century, but they showed little interest in struggling for control of them after Japan won them in the first Sino-Japanese war of 1895. This is unsurprising given both China’s historical weakness at the time, and the fact that these barren rocks are irrelevant from any rational point of view. It is only the distorted logic of imperialism that would elevate control of uninhabited islands into a key aspect of world relations and a huge source of tension.

In spite of its claims, the Chinese government only began to dispute Japan’s authority over the territory when in 1968 it was discovered that the islands may be sitting on top of huge oil and gas reserves! It is no surprise that the dispute has flared up, to the extent that it makes front page news around the world, just as China’s need for raw materials and greater influence over trade routes has exploded, and as Japan’s dominant role in East Asian trade has entered into crisis.

One third of world shipping passes through the South China Sea, in which these islands are situated. The diplomatic relations that govern this trade route are essentially still based on US domination, an outcome of World War II. In terms of spheres of influence in the region, China has amongst the smallest. Vietnam, Cambodia, Singapore, Japan, South Korea, Taiwan, Malaysia and Indonesia all count themselves as US allies. And yet it is to a great extent thanks to China’s recent immense economic development that one third of world shipping now passes through this crowded sea. This means China lacks effective political and military control over the trade routes it depends on.

But Japan and the US, the dominant partnership in the region, are economic and imperialist powers on the wane. More and more, Southeast Asian nations trade with China, and less and less with the US and Japan. However, the latter two will use their military might to cling to every diplomatic and political privilege they have, in order to prop up their power. This contradiction, between the old (and still very powerful) powers and the rising competitor, will only increase with time, and therefore we can expect to see many more disputes and even conflicts over petty islands.

The present tension has been quite deliberately orchestrated and politically exploited by both Japan’s and China’s rulers. It is irrelevant which side “started it”. There is no aggressor and no victim in this struggle between two major powers over uninhabited rocks. However, it is clear that Japan and the US have been planning to manufacture this conflict for some time.

According the the People’s Daily:

“The Japanese Defense Ministry had transferred 2,000 members of Self Defense Forces to establish an ‘islets defense force’ in 2011 to prepare for China's attacks on the Diaoyu Islands conflicts. Since March 2012, some members of Japan's Self Defense Forces began receiving training in the United States and carried out joint exercises with U.S. military. In September 2012, the ‘islets defense force’ again held one-month joint military drill of seizing islands with U.S. military on Tinian Island nearby the territory of Guanhan.”

All these actions preceded the nationalisation of the islands by Japan, and prove that Japan was fully aware of the political and military ramifications of such a move. Naturally the Japanese government was also aware that China could not possibly fail to notice these military exercises, and was entirely conscious of what China’s response would be. This is like a pantomime, in which each side has its preconceived role of which all parties, the audience included, are fully aware. No mature adult is capable of taking seriously the pompous claims from each side about the “sacred” status of the islands as either inherently Japanese or Chinese territory. Everybody knows that what is really being fought over is resources and spheres of influence.

Although Japan and the US are naturally very interested in the surrounding oil and gas reserves, the islands were already under Japanese control before the present drama, so that does not explain Japan’s actions. What is the strategic thinking behind these actions?

The US and Japan would both like to use this to create the impression amongst China’s neighbours that China has imperial ambitions and that Japan and the US are their only reliable allies against this. In addition, the Japanese government has hemorrhaged support thanks to the economic crisis and the decision to restart the nuclear power stations following the Fukushima disaster. Both of the dominant bourgeois parties in Japan, the Liberal Democrats and the Democratic Party, are looking to whip up national chauvinism and the fear of China’s rise to bolster their flagging fortunes.

Despite the enmity between China and Japan, in the epoch of the domination of the world market, both depend on each other for huge proportions of their trade. Since Japan quite deliberately antagonised China by nationalising the islands, a wave of nationalist militancy has swept through China as inevitably as night follows day. Huge protests have swept all the major cities. Japanese businesses (of which there are many in China) have been attacked. In the city of Qingdao, the site of a militant protest against corrupt local officials only a few months ago, the local Panasonic factory was burnt down. Elsewhere one Chinese man was killed for driving a Japanese car!

This has had a measurable impact on Japanese (and to a lesser extent, Chinese) trade, to the detriment of the Japanese economy. According to the Financial Times:

“China accounted for 18 per cent of overall Japanese exports by value in the first six months of the year. In the first 20 days of September, the total value of exports from Japan fell by a tenth from a year earlier, suggesting that the territorial dispute is affecting orders.

“Toyota saw a 49 per cent drop in sales last month in China while Mazda and Mitsubishi Motors suffered declines of more than 60 per cent. Goldman Sachs estimates that sales of Japanese-brand cars in China will be 40 per cent lower in the six weeks to the end of October than the same period last year. Goldman Sachs cut its estimate for earnings per share at Toyota in the fiscal year to March by 9.5 per cent.”

It would appear then that China has emerged strengthened from this conflict. It has served to reveal the new balance of powers and the relations between the competing capitalisms in the region. In the future, as the Chinese economy sucks those around it more and more into its orbit, and as its military, especially its navy, increases its potency, we can expect to see more countries forming alliances with China and not the US. To an extent this conflict has revealed the early stages of this development.

Those that depend heavily on China for their trade are, coincidentally, also those that, like China, have territorial disputes with Japan. South Korea, whose closest competitor is Japan, has benefited substantially from this conflict. The South Korean car manufacturers Hyundai and Kia “posted record combined sales of 127,827 vehicles in China in September, up 9.5 per cent from a year earlier.” China is the world’s largest car market, and will only get bigger. It is no coincidence then that in the past couple of months Lee Myung-Bak, the President of South Korea, has given the huge well of unresolved tension and resentment left over from WWII a big stir by visiting another island chain claimed by both Japan and South Korea. In doing so he was placing South Korea in China’s orbit and against Japan’s. The Japanese nationalists have retaliated by reminding everyone of their obstinacy in refusing to apologise for using Korean women as sex-slaves in WWII.

The Taiwanese ruling class has also been carefully (because of domestic fear of mainland China) positioning itself within China’s orbit more and more. The development of the Chinese economy has made real independence for Taiwan a fiction. Taiwan is a small country, traditionally Chinese and utterly dependent on trade with China. It is therefore not surprising that Taiwan also has positioned itself with China in this island dispute - Taiwan also claims the Diaoyu/Senkaku islands, and in the past few days its ships have engaged in a water cannon battle with Japanese ships in the area. The Chinese government, in a conscious attempt to win over Taiwan, recognises Taiwanese authority over these islands and only claims them for itself insofar as it also claims Taiwan for itself.

What does Japan hope to gain through this? Closer ties with countries such as Vietnam, Indonesia and Cambodia. They are China’s key competitors for the cheap labour on which Japanese multinationals depend. Japanese companies have been planning to move production away from China into these countries, and the outbreak of militant anti-Japanese protests which forced the closure of many Japanese factories can only have accelerated this process. 24% of Japanese manufacturers have said they are considering delaying or reducing planned investment in China. 18% said they were considering shifting production to other countries. Japanese imperialism hopes to exploit cheap labour in surrounding South East Asian nations and to establish a position of dominance over their governments, something it cannot achieve with China. In encouraging China to flex its military muscles, they are trying to drive these countries into Japan’s sphere of influence.

However, there remains one other key ingredient. That is the growing class antagonisms in both China and Japan. Yoshihiko Noda, Japan’s Prime Minister, is rapidly losing support. He is polling at only 34%, compared to 39% for Shinzo Abe, the new leader of the opposition. Noda, whose Democratic Party of Japan (DPJ) took power from the Liberal Democrats for the first time since WWII in 2009, has massively disappointed the Japanese working class. The dethroning of the LDP reflected an implicit move to the left in Japanese society after decades of capitalist stagnation. But the DPJ has instead overseen an even worse period for Japan. Noda has failed to use the Fukushima disaster to break the power of Japan’s nuclear energy consortium, recently pledging to keep all these hated power stations open. He has also just survived a no-confidence vote for increasing VAT by 5%.

That is why he has chosen this time to launch a nationalist distraction from Japan’s problems. This tendency is compounded by the fact that his chief opponent, Abe, is also a bourgeois nationalist who fails to mention the real cause of Japan’s 20 year stagnation - capitalism. Abe therefore has to lean upon the Japanese masses’ fear of China to promote himself. In a recent statement, quoted in the Guardian, Abe made it particularly clear how he is playing the crude nationalist card to obscure the cause of Japan’s problems,

“‘Japan's beautiful seas and its territory are under threat, and young people are having trouble finding hope in the future amid an economic slump’, he said. ‘I promise to protect Japan's land and sea, and the lives of the Japanese people, no matter what.’

“He has said he wants to water-down a 1995 statement by the then socialist prime minister, Tomiichi Murayama, apologising for Japan's wartime aggression, and to withdraw a 1993 apology for its use of Korean women as sex slaves before and during the war. During his time as prime minister, Abe called for the revision of Japan's pacifist constitution and for patriotism to become part of the school curriculum.”

In his previous stint as Prime Minister, Abe infamously visited the Yasukuni Shrine, which pays homage to convicted Japanese war criminals, as he is well aware. There is no way that he can fail to be aware that a visit to the shrine, as Prime Minister, means a direct provocation and insult to China. And yet, as part of his current chauvinist campaign, he has continued to emphasise that he does not regret visiting the shrine, and when asked whether he would do the same if re-elected Prime Minister, he said “Given Japan's current relations with China as well as South Korea, I'd better not say whether I would visit or not.” In other words, yes.

The Chinese Communist Party (CCP) government has long understood how useful it is to remind the Chinese people of the Japanese imperialists’ past crimes in order to distract from the more recent crimes of Chinese capitalists. But the Chinese working class is in a state of ferment. They are reaching their limits of tolerance for the brutal exploitation they suffer. There has been a wave of militant, well organised and successful strikes throughout China. September 2012 has now been registered as yet another month of record breaking strike numbers.

Such is the widespread militancy that the “patriotic” valve gifted the CCP by Japan has itself ended up being used for strike organising. According to the China Labour Bulletin, in four Japanese-owned factories in Guangdong and Shenzhen, workers protested against the Japanese government’s “purchase” of the Diaoyu Islands earlier in the month by holding a strike. This class based method of struggle is precisely what the CCP does not want this dispute to produce. The CCP leadership is only too happy to collaborate with the Japanese capitalists in extracting profit from the Chinese working class.

It is likely that this dispute will soon blow over. Both governments have offered olive branches to escape the conflict whilst saving face. But the hidden cause of this will not go away. The post-war system of international relations is strained. The world, and especially East Asia, is very different to when the US originally set the agenda for the Pacific together with Japan. A gigantic threat to this stability has been produced by the very system of capitalism itself - the growth of Chinese capitalism. But within that, there is an even greater threat to the whole system - the militancy of the massive Chinese working class. But whereas the power of Chinese capitalism threatens to plunge East Asia into an era of nationalist aggression, the Chinese working class has the same interests as those of the Japanese working class - the ending of capitalism.

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